SDL Plc fell by a record as faltering economic growth caused first-half earnings to miss the company’s predictions and the U.K. maker of translation software forecast a drop in full-year earnings.
SDL declined 30 percent to 271 pence, the biggest fall since the Maidenhead, England-based company’s initial public offering in 1999. It was the largest drop among the 600 companies on the FTSE All-Share Index. The number of SDL shares traded was more than 29 times the three-month daily average.
“The company is now on the back foot, competitors are big and ugly, and its supporting bedrock of translation services is of little help to its software ambitions,” George O’Connor, an analyst at Panmure Gordon, said in a note to investors. “SDL should think about what has made the company successful and consolidate to a narrower customer offer,” said O’Connor, who maintained a hold recommendation on the stock while cutting his share-price estimate to 400 pence from 480 pence.
Profit before tax and amortization this year will be in a range of 15 million pounds ($23.5 million) to 20 million pounds, down from 35.5 million pounds in 2012. Sales momentum and bookings at the technology unit in the first half have been below expectations, while profit in the period at the services unit is expected to be “significantly below management expectations,” SDL said in a statement.
“Whilst we did not plan for investments to deliver revenue in the first half, we expected greater momentum from last year to carry into the first half,” Chief Executive Officer Mark Lancaster said in the statement.
The stock has lost 47 percent this year, giving the company a market value of 217.5 million pounds.